ABSTRACT
The present doctor’s thesis aims at identifying the main tendencies and perspectives regarding
the evolution of economic efficiency in general, offering an insight in the one of private agricultural
exploitations in Timis County.
The methodology used for this purpose mainly consists in specialty literature, as well as field
research within private agricultural exploitations in Timis County.
The structure of the thesis comprises 7 chapters followed by conclusions and bibliography.
The first chapter of the thesis contains aspects regarding Romanian agriculture before and
after the adhesion to the European Union, such as: the place and role of agriculture within national
economy, Romanian agriculture between 1990-2006 and evolution prospects in 2007 up to 2013.
Agriculture holds an important position in our country’s economy and politics. It is an
important strategic sector of national economy. It is one of the main components of each country’s
economic, political and social strategy due to its contribution to welfare and social stability.
When it comes to our country, agriculture is one of the most important development resources.
Thus the main objectives and priorities aim at increasing agricultural production and productivity in
view of creating an open competitive market.
Agriculture plays an important part in the structure of national economy both by contributing
to the gross domestic product and by offering employment.
Romanian agriculture was subject to significant changes during the transition period in what
concerns property structure and the forms of organization of the agricultural activity. Basically, the
economic restructuring that took place triggered changes in the price establishment mechanism, in the
way of approaching the various economic and social phenomena, especially as a consequence of
privatization and the restitution of land. This restructuring process took place both on a
macroeconomic level, by the use of certain instruments and mechanisms in strategic actions of the
state, and on a microeconomic level, by the action of economic agents in tight connection to the
market.
The economic problems of transition have made an impact on the weakening of agriculture,
which is presently unable to meet the consumption necessities of the population, nor the quality of the
offer. Production structure is facing strong disproportions between sectors and branches, between
branches and crops [29]
The depreciation of the material foundation, the amplification of a state of subsistence, the
stagnant investments, the destruction of assets (irrigation systems, plantations, machinery, stock
raising units) as well as the mistakes that were made in managing state property goods and in
supporting the process of development of private commercial agriculture, all of these were the main
causes of the poor contribution of agriculture to the gross domestic product, of low agricultural
productivity, and a negative agricultural trade balance.
The present state of agriculture is also a result of the lack of a strategy and coherent legislation
in the field.
Thus, the excessive fragmentation of agricultural properties along with a low rate of
association have led to the emergence of a duality consisting, one the one hand, in a high number of
subsistence and semi-subsistence exploitations, and on the other hand, in a low number of commercial
exploitations totally integrated on the market.
It has become extremely necessary for agriculture to increase its competitiveness in order to be
able to face tough competition and superior legislative, institutional and economic qualifications.
Romania has set the following objectives to be achieved between 2007-2013:
- developing a competitive agricultural and forestry sector, based on knowledge and private
initiative;
- reducing the number of people working in the agricultural field along with developing viable
economic exploitations, by reducing the high extent of agricultural fragmentation and the number of
small farms;
- preserving the quality and diversity of the rural and forestry area in view of achieving a sense
of balance between human activities and the conservation of natural resources.
As for modernizing agricultural exploitations between 2007-2013, according to Stipulation
121 of the National Program of Rural Development, the top priority is increasing competitiveness in
the agricultural and forestry sector with the basic goal of improving the management of human
resources and production factors and complying with national and community standards.
Sustainable agriculture in our country should be regarded especially as a means of covering
the demand of healthy and high quality food. The objectives of sustainable agriculture should be
harmonized with the general development of the rural area. Developing efficient agricultural units and
creating the appropriate competitiveness framework for economic exploitations are central objectives
of the process of agricultural reform in Romania.
Chapter two of the thesis approaches the subject of the organization and representation
systems of farmers in Romania and in the European Union.
The outcome of the agricultural structure after the application of the Land Law proves that
developing viable agricultural exploitations is quite a difficult process. Therefore, the need of
agricultural association and cooperation in Romania is determined by actual facts regarding Romanian
agriculture, such as:
- The average size of individual households resulted from private property restitution is very
small and therefore not suitable for the latest technologies, while the experience of economically
developed countries proves that this concentration of land property could last for a relatively long
time.
- The average size of individual farms in the stock raising sector pleads for the association of
animal breeders.
- After the application of the Land Law, the new owners found themselves lacking the capital,
as well as the necessary qualification in order to utilize top technology.
- Agricultural producers are facing unreasonable price increases due to monopoly prices of
industries in upstream agriculture [13].
In EU member countries agricultural cooperation has developed and progressed by means of
the Common Agricultural Policy, and the promoted reforms have aimed at creating a legislative and
organizational framework to support agriculture and farmers in producing both quantity and quality, in
order to cover own consumption and export stock in terms of economic efficiency and in compliance
with the requirements of environmental protection.
Agricultural exploitations, regardless their operating structure, are not able to cover by
themselves the expenses on services they need in order to carry out the agricultural production
process. Hence the need of association of agricultural producers appears, in various forms of
cooperation.
Agricultural cooperation is the main factor having influenced the development process in
global agriculture, especially in EU member countries, as a result of its various implications on
farmers and agricultural production units.
For Romanian farmers, association and the need of being represented are basically determined
by their will to find common solutions to their problems regarding land exploitation, technical
equipment, finding the necessary financial means, capitalizing production, as well as dealing with
certain issues related to local or central political and administrative bodies.
Agricultural production and farmers representation units must provide the economic and
technical-organizational conditions in order to reduce the differences in productivity and the gap
between Romanian agriculture and the one promoted by the European Union. The gap between
Romanian agriculture and the one in developed countries is also significant and depends on the
general economic development level and on differences between the various agricultural units:
households, production units, economic organization units, farm dimension, the structure of utilized
production factors, the structure of services for agricultural production, marketing and financing
structure, the support system of agriculture, etc.
The third chapter of the thesis contains aspects regarding the forms of organization and land
exploitation in agriculture. In this respect, we have approached matters connected to the structure of
property, the structure of agricultural exploitations, as well as their perspectives within the process of
integration of Romania in the European Union.
After 1989, Romanian agriculture was subject to less spectacular development than other
sectors, especially in terms of production structure and volume. Nevertheless, there have been some
major changes in the field in what concerns the structure of property and employed population, as well
as export-import relations.
The most important element of European agricultural units consists in agricultural
exploitations, as they play a double role in the rural landscape: agricultural production units and
households for the farmer’s family.
The numerous forms of land exploitation are the result of the diversity of types of property and
the large share of private property of the land, but also a consequence of the gradual disappearance of
the monopoly of companies owned by the state and their privatization.
The production structure of Romanian agriculture is facing disproportions between the vegetal
and animal sector, between the various branches and crops, as well as an accelerated extensiveness
[89].
In our country’s agriculture, the extensive production structure prevails because of the
dominance of cereal crops in the cultivated area and in production, as well as that of other crops
allowing low valorification of the soil. The explanation of the fact that in Romanian agriculture we
cannot talk about an intensive production structure resides in the fact that the different intensive
branches and crops, stock raising farms practicing intensive production methods have lost this
character, and when it comes to industrial sock raising units or greenhouses, their activity has
decreased, they either went bankrupt or are merely surviving on the market.
The main goal of the complex technical-economic activity of organizing exploitations and the
agricultural area is providing the optimum organizational-territorial conditions for the best
valorification of land resources, the concentration and specialization of production, and the efficient
exploitation of the fields according to the development strategy and agricultural production zoning.
There is a wide gap between Romanian agriculture and that of the European Union. The
causes of these significant disproportions reside in historic legislative reasons, as well as the
substantial movement of the agricultural labor force towards other sectors. The property transfer
system also encouraged or at times discouraged the consolidation of agricultural exploitations [71].
The future orientation towards a certain production structure is not enough for organizing the
activity of an agricultural exploitation. The final outcome needs to be the specialization and
diversification of the agricultural production.
Chapter four contains aspects related to the concept of economic efficiency and its
particularities in agriculture, as well as the economic efficiency indicators.
In Micul dicţionar enciclopedic (Small Encyclopedic Dictionary), economic efficiency is
defined as "the ratio between the ensemble of favorable economic effects (material, social, value)
resulted from an economic activity and the total amount of efforts required by that activity. Effort is
never reduced to human effort, considered as the number of people and the number of hours they
actually produce, because in this case the real effort is being ignored".
Etymologically speaking, efficiency is the ability of an economic activity to generate positive
effects.
Economic efficiency provides a way to achieve economic stability, and stability is an
imperative for an efficient economy.
We can represent economic efficiency as a ratio between useful effect or achieved result and
the necessary effort for achieving it. Thus, increasing economic efficiency means increasing the
achieved results per effort unit, or in other words, reducing the expenditure made for obtaining one
product unit.
Efficiency has a complex nature and that’s why it requires a comprehensive analysis of all the
efforts made and all the results achieved both in terms of volume and social structure and significance.
In agriculture, by correlating the assets of an exploitation with the financial-economic results
deriving from its size and operation, economic efficiency can be defined as the ratio between the
effects quantified by means of a series of financial-economic indicators synthesizing the whole activity
and the efforts considered to be the assets of that exploitation.
In order to increase economic efficiency in agriculture, each agricultural exploitation should
make an effort to render profitable all products and organizational structures, but also to increase as
soon as possible the profitability of each sold product in order to reach the competitiveness level
required by market competition.
In what concerns the content and signification of the efficiency concept, but also the
possibilities of quantification and of finding some methods for increasing efficiency, a definite system
of efficiency indicators is extremely important.
The correlation between efforts and effects can be quantitatively expressed by means of
efficiency indicators. They express a certain feature of the process of exploitation of the given
resources, reflecting the effect-resource causality.
In the relative measurement of efficiency we use efficiency indicators resulting by matching
the effects against the effort made for their achievement and vice versa [5].
The last part of chapter four contains aspects related to agricultural profitability. Profitability
illustrates the efficiency of the financial and material means invested in a company’s operation,
measuring the profitability of the means, or to be more specific, their relative capacity to bring profits.
Analyzing profitability means comparing the results with the means used in order to achieve them [5].
An activity is considered profitable if the ratio income/expenses is super-unitary and the
difference between the two indicators is positive.
Any company aims at making enough profit to pay off capital investments, to uphold its
technical and economic potential, to keep up a rational development according to the evolution of the
market and circumstantial tendencies [35].
Chapter five provides an insight regarding the analysis of the agricultural resources and
financial means and the analysis of the labor force in agriculture.
The analysis of the agricultural resources and financial means is based upon the balance sheet,
the profit and loss account, as well as the schedules to the two documents.
The object of this analysis is studying the self-financing capacity under conditions such as
decisional autonomy, preserving the integrity of the company’s property, maintaining an optimum
balance between its financial means and the natural development of financial relations with other
companies.
If there is no efficiency when it comes to the efforts involved and the financial-economic
results achieved, the causes may be both related to the resources (inflation rate, deficiencies in the
management of the assets, etc.) and also to the various financial-economic factors (unfavorable
circumstances, delayed utilization of top production technologies, inappropriate organization of labor
and production, etc.).
Besides the aspects related to the analysis of agricultural resources and financial means, this
chapter also contains aspects regarding the analysis of the labor force in agriculture.
When it comes to human resources in agriculture, they include both the necessary labor force
to perform agricultural works, as well as the one providing technical coordination, organization and
management of all agricultural resources. As production factors, human resources in agriculture have a
tremendous influence on the economic activity, both quantitatively and especially qualitatively.
The efficient exploitation of human resources in agriculture means increasing the employment
rate in the rural area, as well as creating an optimal balance between labor productivity and the
remuneration of agricultural workers.
The labor force in our country’s agriculture has had a different evolution within economy as a
whole and compared to the European one. The agricultural labor force has increased mostly on the
back of residents of the rural area or by reactivating persons in age groups still able to work, people
retired or unemployed from urban areas. A major tendency is the ageing and feminization of the
population in the rural area.
In order to provide food safety and advantageously integrate within the agricultural structures
of the European Union, the fundamental requirement of Romanian agriculture is to increase labor
productivity.
In order to achieve that, besides technical upgrading and a better organization of all activities,
sustained measures are required in training the labor force to be able to operate with modern
technologies.
In what concerns time management in agriculture, it is influenced by the specific
particularities of agricultural production.
Labor productivity significantly determines - along with other important qualitative factors the economic efficiency of agricultural exploitations.
According to the Dictionary of Agricultural Economy, "agricultural labor productivity is the
efficiency of social labor within the agricultural production process; this is represented by the volume
of agricultural works or products obtained per labor time unit, or by the labor expenses per product
unit or work" [38].
The level and dynamics of labor productivity are not only influenced by the quantity of
performed labor, but also by its structure and quality as elements defining the productive capacity of
labor and consequently the potential productivity.
Therefore, productivity is not only determined by the number of qualified personnel existent in
agriculture, but also by the way this personnel is distributed per branch profile and territory, by the
way they are doing their job, by their capacity to adjust to the mobile nature of agricultural production,
to changes in the social division of labor etc.
Increasing labor productivity, as well as the one of all other production factors, generates a
series of economic and social benefits both for production itself and the consumer.
The sixth chapter of the thesis focuses on aspects related to the economic analysis of land
resources and technical-material resources in agriculture.
Land as the main means of production in agriculture is characterized by a series of specific
features differentiating it from the other means of production with a significant influence on
agricultural policies.
It is the only agricultural means of obtaining vegetal products that are indispensable both to
human rational alimentation, and to animal breeding.
One of the main goals of Romania’s agricultural policy is the rational exploitation of land and
that requires a special preoccupation with the health and management of agricultural fields.
The global economic efficiency of land resources is the ratio between economic effects
directly or indirectly connected to the exploitation of the agricultural and non-agricultural land
exploited by an agricultural unit in a given period of time and the efforts required by the exploitation
[13].
The development and modernization of agricultural exploitations is tightly connected to the
expansion, improvement and rational exploitation of technical-material resources used in the complex
process of obtaining and delivering agricultural products.
Economic efficiency also depends a great deal on the management’s capacity of utilizing new
technologies, of sustaining their decisions to purchase new equipment and exploit it correctly
according to the natural-economic conditions of each agricultural unit.
In order to face growing competition, agricultural units need to find their own different way of
mixing production factors and to organize their assets so as to be able to adjust to updating
requirements and to all particularities of the agricultural process. Technological improvements must
aim especially at making use of those production factors that have positive effects on cost reduction
and correspond to environmental protection regulations.
When it comes to promoting scientific progress in agriculture, it is possible first of all by
mechanization. Technical-scientific progress and innovation have a tremendous impact on production
and on equipment productivity. Agriculture requires new production methods that may lead to cutting
costs and improving quality by means of better merging economic factors with natural ones, internal
factors with the ones outside the exploitation.
Increasing agricultural production can be achieved with small economic efforts compared to
the results, by using specific agricultural means.
The economic efficiency of exploiting technical-material resources is the ratio between the
effect materialized in indicators synthesizing the entire economic-financial activity (total income,
turnover, total value of production, gross profit) and the total value of fixed assets and current assets
(raw material etc.) - as the effort made in order to generate this financial-economic effect.
Modernization in agriculture is tightly connected to the quantitative and qualitative growth of
fixed and current assets influencing both land and livestock.
The efficiency of agricultural mechanization is partly influenced by the technical-economic
features of machinery, and also by the series of factors defining the natural and economic environment
where tractors and agricultural equipment are used [41].
In a competitive market economy, obtaining higher productivity per hectare and per animal,
increasing labor productivity and profitability, all of these depend a great deal on the size, structure,
quality and efficient management of the technical-material resources.
The economic efficiency of technical-material resources in agriculture increases only when the
efficiency correlation between effort and effect is respected, in other words when the growth rate of
the various synthetic economic-financial effects is superior to the growth rate of technical-material
resources.
The seventh chapter contains aspects related to the trends and development perspectives of
economic efficiency in private agricultural exploitations of Timis County.
In the first subchapter we have outlined some general characteristics of agricultural
exploitations in Timis County.
In order to identify the main tendencies and development perspectives of economic efficiency
in private agricultural exploitations of Timis County, field research was carried out in Timis County,
mainly on three types of agricultural exploitations:
- private capital companies and cooperative associations;
- individual subsistence or semi-subsistence exploitations;
- family partnerships.
The theme of our survey consisted in the main aspects regarding the exploitation of the
agricultural field, technical equipment, aspects regarding the stock raising sector, labor force, financial
results, capitalization of agricultural production.
This theme was set in order to determine the indicators measuring the economic efficiency of
these types of exploitations.
For the purpose of this analysis a questionnaire was created for each type of the above
mentioned types of exploitations.
In choosing the three types of exploitations we have considered territorial distribution and
pedoclimatic areas. The exploitations under research were chosen so as to comprise the entire area of
Timis County, as well as all the pedoclimatic areas of the county.
Different aspects were examined by this survey for all three types of exploitations.
For private capital companies and cooperative associations the questionnaire was made up of a
series of 14 questions, and the main aspects under research were location, size, animal stock per
species, activity profile, technical equipment. We also analyzed turnover, income, expenses and
achieved results. The next aspects considered were related to paid and unpaid labor force, permanent
or seasonal employees, capitalization of production: own consumption, sales on the direct market,
sales by means of retailers.
The survey was followed by aspects regarding the share of production destined for the market.
The last aspects analyzed with this type of questionnaire were those related to the structure of
crops within the total cultivated area in order to determine a series of indicators of economic efficiency
and to make a comparison with similar indicators determined for the entire Timis County.
The next type of questionnaire was drawn up for individual subsistence and semi-subsistence
exploitations in Timis County. The questionnaire for this type of exploitations was made up of a series
of 18 questions.
The main aspects under research by this type of questionnaire were related to location, age of
the family head, as well as information regarding the training pursued or not, information regarding
the time allocated to agriculture within a calendar year. We also considered aspects related to the total
size of agricultural field owned by each exploitation, utilization of the land, whether the land was
used on one’s own account or leased, and then aspects related to animal stock, technical equipment
and whether they used mechanization or not.
The next aspects under research were related to subsidies, bank credits, exploitation
investments, insurance system, etc.
The third type of questionnaire was drawn up in order to analyze family partnerships in Timis
County. This type of questionnaire was made up of a series of 18 questions regarding location,
information related to the owner and the owner’s family, information regarding the size of agricultural
field owned and whether it was leased or not, animal stock. We also considered aspects regarding
ways of capitalizing production, namely whether the household sold products on the market and what
types of products, and also the share held by these sales in the total annual production and in the
family’s annual income. The next aspects under research were related to the insurance system of crops
and animals, and then we gathered information about the present state of the household, whether there
have been improvements or not. The personal suggestions of the owners regarding the improvement of
their households and agriculture in general were also considered.
This doctor’s thesis ends with a chapter of theoretical and practical conclusions drawn as a
result of this research.